Spline meshes don't seem to collapse evenly if they have geometry in between the start and end points. The test project demonstrates this by having a spline mesh move its end point closer to the start point so you can see how it collapses.
I attached an image comparing the bad and good versions so you know what the incorrect collapsed mesh looks like.
RESULT
When modularMesh_Cut is collapsing it doesn't do so evenly along the mesh. It appears the verts in the center collapse much sooner providing a wrinkled result.
EXPECTED
The mesh collapses evenly as one end gets closer to the other.
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